Why are insurance policies so hard to understand? As a business owner or homeowner, understanding an insurance policy before purchasing should be easy to read. Insurance companies are notorious for using complicated verbiage that is nearly impossible for policyholders to understand what is covered and excluded. Insurance companies are aware that policyholders don’t understand the complex and lengthy legal text packed into policy pages. Lawmakers now require insurance policies to be written in digestible language that policyholders can review and understand, even if they don’t have a law degree.
“Plain English” laws have been in practice since the 1970’s and currently more than half of all of the states are following this law. However, many policyholders do not understand what their policy entails and the associated risks. Although there has been much progress in readability with these insurance contracts, there is still work to be done. An example of a policyholder not fully understanding their coverage is the expectation that an insurance company will pay for the entire cost to rebuild a business destroyed by a natural disaster. Most insurance companies have limits on the amount of money disbursed after a total loss, and gaps in coverage often exist. For a business owner, this means that it is possible not to receive the full amount of money needed to rebuild after a disaster.
Many policyholders believe their homeowners or business insurance policy will cover water damages such as sewer backups, sump pumps, and drains. However, most insurance policies exclude this type of damage. This example is why the legal system should hold insurance companies accountable for the confusing wording implemented in the insurance documents that a policyholder is expected to understand. However, the courts typically side with the insurance companies and agree that policyholders are responsible for understanding the wording within the policies.
Some insurance companies still use complicated and manipulative tactics to confuse policyholders. The courts still hold clauses that insurance companies are required to be precise with language, and the terms must be presented and not hidden. Overall, the conflict between insurance policies that are easy versus hard to comprehend is still present. However, we hold insurance companies accountable by fighting for our clients.
At Strategic Claim Consultants, we work on your behalf to increase your claim’s payout, reduce frustration, and expedite your restoration. Thousands of residential and business insurance policyholders have trusted us with their claims – and we’ve been successful in getting them the settlement they’re entitled. Contact us today for a free consultation so that we can understand your needs and determine if we are the right fit to represent you!